Naturally, in a competitive market context, corporate aggregation operations are viewed favorably as they ideally lead to greater efficiency, strengthen market players, and ultimately benefit the entire market (competitors and consumers).

However, such operations sometimes risk harming some of these interests due to the actors involved and/or the manner in which they are structured.

Therefore, at the European level, there are a series of regulations specifically designed to protect these interests.

Most corporate aggregation operations, given their size, do not risk violating any regulations designed to protect these interests. However, in this article, we will summarize the parameters to consider in order to avoid facing censorship.

In the context of corporate concentration operations in the European Union, companies must navigate a complex regulatory landscape to ensure that their transactions are not subject to censorship by the European Commission. Such censorship can result in significant delays, alterations to the terms of the agreement, and, in some cases, a complete blockage of the operation. To prevent such outcomes, it is essential to consider several key parameters.

1. Revenue Thresholds

One of the first aspects to consider is the exceeding of the revenue thresholds established by Regulation (EC) No. 139/2004. Concentrations that surpass these thresholds must be notified to the Commission. If the revenue of the involved companies is below these thresholds, the operation will not be subject to the Commission's jurisdiction, thereby avoiding the need for a review.

2. Competition Analysis

The European Commission assesses whether the operation may lead to the creation or strengthening of a dominant position. It is crucial to conduct a thorough analysis of market competitiveness, considering:

• Market Shares: What is the combined market share of the two entities post-concentration?
• Presence of Competitors: Are there significant competitors that can keep competition active in the market?
• Barriers to Entry: Are there significant obstacles to the entry of new competitors into the market?

A solid analysis of these factors allows for the identification of potential issues before notification.

3. Impact on Consumers

The Commission also considers how the concentration may impact consumers. It is important to assess whether the operation could lead to:

• Price Increases: Could the acquisition lead to an increase in prices for consumers?
• Reduction in Quality: Are there risks to the quality of the product or service?
• Decreased Choices: Will consumers lose viable alternatives in the market?

Demonstrating that the operation will have positive effects on quality and choice for consumers can make a significant difference.

4. Market Conditions and Innovation

Another fundamental parameter is the potential impact of the concentration on innovation. The Commission may be more inclined to approve operations that demonstrate the promotion of innovation rather than hindering it. Although acquisitions often aim for efficiency, it is essential to highlight future investments in research and development post-concentration that could benefit the market and consumers.

WA